Binance Faces $86 Million Tax Demand from Indian Authorities
According to reports from local Indian media outlets, India’s tax authorities have issued a show cause notice to Binance, the world’s largest cryptocurrency exchange, demanding approximately $86 million (722 crore Indian rupees) in unpaid Goods and Services Tax (GST). This marks the first time the Directorate General of Goods and Services Tax Intelligence (DGGI) has taken such action against a global crypto exchange, signaling increased regulatory scrutiny of the cryptocurrency sector in India.
The notice, issued by the DGGI’s Ahmedabad unit, alleges that Binance collected fees from Indian customers for trading virtual digital assets without proper GST registration. The tax demand covers the period from July 2017 to March 2024 and classifies Binance’s services under the Online Information Database Access or Retrieval (OIDAR) category, which is subject to GST in India.
According to sources familiar with the matter, Binance reportedly earned over $476 million (4,000 crore Indian rupees) in transaction fees from Indian users. These earnings were allegedly credited to Nest Services Limited, a Binance Group company based in Seychelles, raising concerns about tax compliance.
Binance has confirmed its awareness of the tax notice and stated that it is reviewing the details while cooperating fully with Indian tax authorities. A Binance spokesperson emphasized the company’s commitment to adhering to relevant domestic legislation.
This tax demand follows a series of regulatory challenges for Binance in India. In January 2024, the exchange faced a ban for non-compliance issues but later received approval from India’s Financial Intelligence Unit to operate as a registered virtual asset service provider. In June 2024, Binance was fined approximately $2.2 million for providing services to Indian clients without adhering to anti-money laundering regulations.
The crypto exchange has reportedly challenged the tax notice, indicating its intention to address the issue through legal channels. This move mirrors similar cases where companies have contested tax demands from Indian authorities.
The action against Binance is part of a broader effort by Indian regulators to bring cryptocurrency operations under the country’s tax framework. It also highlights the growing global regulatory challenges faced by crypto exchanges, with Binance encountering legal and compliance issues in multiple jurisdictions, including the United States and Nigeria.
